Posted on May 10, 2012 10:43:31 PM [
BusinessWorld Online ]
CONDOMINIUM BUILDER SM Development
Corp. (SMDC) has sealed a deal to acquire a company that owns a 1.09-hectare
prime lot along Epifanio de los Santos Ave. (EDSA) for P1.25 billion, the
latest in the Sy-led firm’s aggressive land banking efforts.
On Wednesday, SM Development signed an
agreement to fully acquire the property subsidiary of Euro-Med Laboratories,
Inc., a disclosure released yesterday showed.
The subsidiary, 102 E. De Los Santos
Realty Co., Inc. (102 EDSA), has an authorized capital of P220 million and an
outstanding capital stock of P2.10 million.
“The transaction is expected to be
completed in about 36 months after signing the agreement,” SM Development said.
At present, 102 EDSA owns two lots
with a total area of about 10,936 square meters on the corner of EDSA and
Madison St. in Mandaluyong City, where Euro-Med’s plant is located.
SM Development was not immediately
available to comment on its plans for the lot.
Following the acquisition, Euro-Med
intends to relocate its equipment and consolidate its manufacturing operations
to its Cavite property in a bid to “generate operational efficiencies and cost
reductions,” a separate disclosure showed.
The pharmaceutical company owns a
plant located on a 36,314-square-meter lot in Dasmariñas, Cavite, which
consists of offices, four warehouses, a power plant, and other storage
facilities, Euro-Med’s 2011 annual report showed.
The medicine manufacturer earned
P242.50 million in net income last year, 18.79% down from 2010’s P298.59
million as higher expenses offset a flat growth in revenues.
SM Development, for its part, is
looking to spend around P30 billion in capital expenditures and launch five
residential condominiums in Metro Manila that will have an estimated total
market value of P37 billion, adding to its current portfolio of 15 SM
Residences projects and two projects under the M Place brand.
The acquisition comes on top of claims
from parent firm SM Investments Corp. that is nearing a deal to acquire a
controlling stake in the holding firm behind Ortigas & Co. and its vast
landholdings.
A buy-in, analysts had said, could
result in a profitable synergy of property assets and development know-how.
SM Development is also firming up its
overseas expansion plans, with work on a number of high-rise structures in
China seen to start as early as this year, earlier reports said.
The company’s consolidated net income
rose by 33% to P1.21 billion in the first quarter over year-ago levels,
reflecting a 59% year-on-year growth in the value of pre-sold units.
Consolidated revenues increased by 72%
to P5.83 billion, a bulk of which were comprised of revenues from real estate
operations.
SM Development shares slid by 0.57% to
P7.00 apiece yesterday, while Euro-Med shares rose by 10.53% to P2.10 apiece.
-- Franz Jonathan G. de la Fuente
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